Suspended Vice-Admiral Mark Norman leaves court following a hearing on access to documents in Ottawa, Friday, Nov. 23, 2018. New court documents show public servants discussing the risk to taxpayers as successive federal governments have turned to sole-source contracts to buy desperately needed equipment for the Canadian Forces and others. (Adrian Wyld/The Canadian Press)

Sole-sourced contracts can be ‘raw deal’, top officials said in navy ship case

Prime Minister Justin Trudeau’s government has chosen to sign several sole-source contracts to bolster the coast guard’s aging icebreaking fleet and the country’s fighter-jet force

New court documents show public servants discussing the risk to taxpayers as successive federal governments have turned to sole-source contracts to buy desperately needed equipment for the Canadian Forces and others.

The documents were filed on behalf of suspended Vice-Admiral Mark Norman, who is charged with breach of trust in connection with one such contract. They land amid frustrations with Canada’s military procurement system — including because of political mismanagement — that have led to the need for quick fixes.

Prime Minister Justin Trudeau’s government has chosen to sign several sole-source contracts to bolster the coast guard’s aging icebreaking fleet and the country’s fighter-jet force, buying time to find permanent replacements.

READ MORE: Out with the old: Trump to kill old NAFTA to push Congress to approve USMCA

Sole-sourcing does make sense in many cases, said defence analyst David Perry of the Canadian Global Affairs Institute, particularly where there is an emergency or it’s clear that only one company can meet the government’s needs.

“But if you’re sole-sourcing to fill a capability gap, that’s the result of mismanaging a procurement to the point where you are out of options and have no alternative,” Perry said. “That’s not really a good reason to be sole-sourcing.”

The Tories under Stephen Harper once intended to buy a fleet of F-35 fighter jets on an untendered contract, but aborted that plan in 2012 once the full price became known.

Then the Trudeau government planned to spend about $6 billion on 18 sole-sourced “interim” Super Hornets from Boeing because it said Canada needed more fighter jets to support its aging CF-18s until replacements could be purchased through a competition.

The Super Hornets deal eventually fell apart because of a trade dispute with Boeing. So the government is buying 25 second-hand Australian fighter jets, also without a competition. Canada isn’t expected to get new fighter jets until at least 2025.

The Liberals also recently bought three second-hand icebreakers from Quebec-based Davie Shipbuilding for the coast guard, whose existing fleet is on average 35 years old — with no immediate plan to replace it on the horizon.

Suspended as the military’s second-in-command in January 2017, Norman was charged in March 2018 with one count of breach of trust for allegedly leaking cabinet secrets to Davie over a different contract. He has denied any wrongdoing and vowed to fight the charge.

The case against Norman centres on a sole-sourced deal negotiated between Davie and the previous Conservative government in 2015, in which the Quebec shipyard proposed converting a civilian cargo ship into a temporary support vessel for the navy.

The $700-million contract with Davie was not finalized before that year’s federal election. Although the newly elected Liberals at first wanted to delay it for a closer review, they signed off on the deal a short time later.

Before Liberal ministers agreed to buy the converted ship, bureaucrats from the Privy Council Office, the government’s top department, wrote a secret briefing note in November 2015 that discussed the problems with not holding a competition.

“The risk inherent with a sole-source contract is that much of the leverage in the contract negotiation resides with the company,” the bureaucrats wrote, even as they noted that the Conservatives had exempted the deal from the usual oversight for such projects.

Despite these concerns, the officials recommended the government approve the deal. Partly because they had assessed that “risk mitigation measures” were in place, but mostly because the navy urgently needed a support ship for faraway operations.

The court documents, none of which have been filed as exhibits or tested in court, include RCMP interviews with civil servants that suggest politicians’ desire for votes in Quebec also played a role in the decisions about the ship. But the navy’s need for the vessel was real.

The navy at the time had just retired its 50-year-old support ships and while replacements are being built in Vancouver through the government’s national shipbuilding plan, numerous delays and problems mean they won’t be ready until the 2020s.

The navy had originally expected to get new support ships in 2012.

The briefing note said a competition could have been held to find another, perhaps cheaper, solution, but ”a competitive process would take longer to deliver a solution — likely 10-14 months for a contract award, and then more time for the service to be ready.”

RCMP interviews with several senior civil servants raise similar concerns about awarding a contract to Davie without a competition while also alluding to the sense of urgency in getting new support ships.

The Defence Department’s head of procurement, Patrick Finn, told the Mounties that other companies were clamouring to compete to supply a temporary support ship in late 2014, and that “the information existed to say that this could be done competitively.”

But Finn noted that Davie had already found a ship that it could convert for the navy, which “at that point had no replenishment ships.”

Melissa Burke, an analyst with the Privy Council Office who attended various cabinet meetings about Davie’s proposal in 2015, told the RCMP that federal procurement officials were unhappy because “they felt the taxpayers were getting a raw deal.”

Lee Berthiaume, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

In 2019, roughly one person died every three days in Surrey due to illicit drug overdoses

123 people died in the city in 2019, down from the previous year

BC Liberals firing at NDP due to fact new Surrey hospital not in budget

But Surrey-Panorama MLA Jinny Sims says business case is needed first

United Nations designates Surrey a ‘Tree City’

Surrey is one of 59 cities in the world to receive the designation

White Rock seeks assistance for park rain damage

City applies for provincial funding following closure of Ruth Johnson Park and ravine

Surrey RCMP looking for missing boy, age 14

Brayden Ritchat, 14, last seen in the 10800-block of 141st Street in Whalley on Feb. 21

Protecting privacy key to stopping spread of COVID-19, B.C. health officials say

The number of coronavirus cases in B.C. remains at seven

Toffoli scores OT winner as Canucks beat Habs 4-3

Demko makes 37 saves for Vancouver

Private clinics would harm ‘ordinary’ people using public system in B.C.: lawyer

Health Minister Adrian Dix announced in 2018 that the government would begin to fine doctors $10,000

B.C. terminates contract with hospice society refusing assisted death

Delta Hospice Society loses hospital service fund of $1.5 million

Child in hospital following fatal crash that killed father, sibling on B.C. highway

The single vehicle crash occured near Kamloops on Highway 5A

‘Die!’: Vernon councillor mailed death threat

This story contains information that might be sensitive to some readers

B.C. landlord can’t serve eviction notice because tenant is in jail

Homeowner baffled at arbitrator decision based on notice of hearing not being served properly

Hidden message connects Castlegar homeowners decades apart

The Rodgers family was surprised when a message fell out of the walls as they were renovating

Most Read